On Friday, Alvarez & Marsal (A&M) was selected but a couple of IRPs said their bids were lower than the winning bid.
Banks invited fresh bids on Saturday, where A&M was again selected. “The earlier process on Friday had a technical flaw. Hence, fresh bids were called,” a senior public sector bank official said. A lender said A&M as the resolution professional was selected late on Saturday night on the criterion of lowest financial bid after the technical bidding process.
Sources in audit firms said A&M’s initial offer was Rs 1.6 crore a month, made on Friday, which it reduced to Rs 80 lakh a month on Saturday after all bidders for the mandate objected to the initial offer. Grant Thornton had made the lowest bid of Rs 70 lakh a month, said a source. The IRP process is expected to last 10 months.
A source in a leading audit firm said it, too, had made the second presentation and bid on Saturday and was in “wait” mode. “We are waiting for information from the bank (SBI) on who won the mandate,” the source said.
The meeting to appoint the IRP was taken by State Bank of India, and was attended by other banks such as ICICI Bank, IDBI Bank, Canara Bank, Corporation Bank and Central Bank of India.
A mail sent to A&M did not elicit any response. Videocon declined to comment.
The Reserve Bank of India had sent the first list of 12 companies
to the National Company Law Tribunal (NCLT) in June, after these companies
defaulted on loans. Videocon is part of the second list of 28 companies identified by the RBI for resolution under the Insolvency and Bankruptcy Code.
Altogether, RBI has asked banks to resolve debt of almost Rs 2,50,000 crore and set aside 50 per cent of these loans as provisioning. Reliance Communications also became a non-performing asset in the December quarter but is not on the RBI list. The banks will make 15 per cent provision for RCom’s Rs 44,700-crore loan.